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Cournot Competition and "Green" Innovation: An Inverted-U Relationship

Luca Lambertini (), Joanna Poyago-Theotoky and Alessandro Tampieri ()

No 207397, Climate Change and Sustainable Development from Fondazione Eni Enrico Mattei (FEEM)

Abstract: We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions ("green" innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in "green" R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximise social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 24
Date: 2015-08-05
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https://ageconsearch.umn.edu/record/207397/files/NDL2015-073.pdf (application/pdf)

Related works:
Journal Article: Cournot competition and “green” innovation: An inverted-U relationship (2017) Downloads
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015) Downloads
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015) Downloads
Working Paper: Cournot Competition and “Green” Innovation: An Inverted-U Relationship (2014) Downloads
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemcl:207397

DOI: 10.22004/ag.econ.207397

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